Bloomberg News

ArcelorMittal, Viacom Sell Bonds as Yields Hover Above Record

February 24, 2012

Feb. 23 (Bloomberg) -- ArcelorMittal, the world’s biggest steelmaker, and Viacom Inc. sold bonds today as investment-grade borrowing costs hold within a percentage point of the record low reached in August.

ArcelorMittal issued $3 billion of notes due in three, five and 10 years in its first debt offering in a year, according to data compiled by Bloomberg. Viacom, the owner of the Nickelodeon and MTV cable networks, issued $750 million of three- and 30- year debt, Bloomberg data show.

Yields on investment-grade debt fell to 3.51 percent yesterday, 0.6 percentage point above the record-low 3.45 percent reached in August, according to Bank of America Merrill Lynch index data. The measure has held within a percentage point of the low since Feb. 6 as the Federal Reserve pledges to hold interest rates near zero percent through at least late 2014.

In other sales today, CSX Corp., the biggest eastern-U.S. railroad, issued $300 million of 30-year debt and Goodyear Tire & Rubber Co., the largest U.S. tiremaker, sold $700 million of 10-year notes, Bloomberg data show.

ArcelorMittal sold $500 million of 3.75 percent, three-year notes that yield 340 basis points more than similar-maturity Treasuries, $1.4 billion of 4.5 percent, five-year notes at a 370 basis-point spread, and $1.1 billion of 6.25 percent, 10- year debt at 435 basis points, Bloomberg data show.

Viacom Offering

In its previous sale in February 2011, the steelmaker issued $500 million of 3.75 percent, five-year notes, $1.5 billion of 5.5 percent, 10-year notes and $1 billion of 6.75 percent, 30-year debt, Bloomberg data show. ArcelorMittal has reduced its net debt to $22.5 billion on Dec. 31 from $24.9 billion on Sept. 30, according to a presentation on its website.

Viacom, based in New York, last tapped the bond market in December, issuing $1 billion of notes maturing in five and 10 years, Bloomberg data show.

Viacom sold $500 million of 1.25 percent, three-year notes at a 90 basis-point spread and $250 million of 4.5 percent, 30- year debt at 150 basis points over Treasuries. In October 2007, the last time the company sold 30-year bonds, it issued $250 million of 6.75 percent debt at a 203 basis-point spread.

--Editors: Richard Bravo, Alan Goldstein

To contact the reporter on this story: Sapna Maheshwari in New York at sapnam@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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